Monday, February 20, 2017

"Innocent Owner" - If Riza Is Innocent Then Who Is Guilty?

Lawyers for Riza Aziz in Hollywood appear to be adopting a fashionable maxim, which is that if you say something forcefully and often enough many will believe it.

By this one can assume they are seeking to influence people back in Malaysia and their own desperate client rather than the sober judges, who will have read the DOJ court order from top to bottom.

In particular, in his effort to dismiss the 1MDB case last week, Attorney Mathew Schwartz of Boies, Schiller & Flexner claimed that, despite the 136 page seizure notice, the DOJ have brought no actual evidence to prove that Riza knew he was receiving stolen money from 1MDB.

“Despite its length, the Complaint lacks basic and essential detail. Most fundamentally, the Complaint fails to identify who committed the crimes that allegedly give rise to forfeiture…the Complaint details a number of transactions, but frequently fails to allege who was responsible for them. The Complaint certainly never makes allegations sufficient to conclude that anyone misappropriated money from 1MDB with the requisite scienter [knowledge of wrongdoing]…”

In other words, Riza’s defence is that he didn’t steal the money even though he spent it and no one has yet proven that he knew that it was stolen.

What remains of 1MDB’s frittered billions now looks set to be spent to a considerable degree on these sorts of arguments, as the lawyers coin it in, even though anyone who has actually read the Department of Justice’s court order can only laugh at the contention that there is a lack of evidence. The FBI has tracked hundreds of millions of 1MDB’s missing money from the moment it left Malaysia down to the last wire transfer into Riza’s accounts, in order to finance his films, gambling, houses and other personal spending.

They also have testimony from banks, emails and phone recordings of 1MDB officials as they bullied reluctant bankers to release money, supposedly to pay joint venture partners, but actually to pass it to Riza’s pal, Jho Low. Jho Low, as all Malaysians know, was the proxy for Riza’s step-dad (Prime Minister Najib) at 1MDB.

It is this same hard evidence that has been resulting in a series of on-going criminal convictions in Singapore and there are more to come.

The Middle Eastern ‘Donor’ excuse comes up again

However, according to his lawyers Riza didn’t know this was how he got the money. In their immortal phrase he is the “innocent owner” of his string of properties and production company. So, he can’t be blamed or have any of these things (his Beverly Hills mansion, Belgravia town house, New York penthouse, film company profits) taken away from him.

Just like his step-dad Najib, the lawyers say, Riza put his good fortune down to the inexplicable generosity of a Middle Eastern gentleman, who just happened to be involved in a joint venture with 1MDB:

“the Defendant Properties are … beneficially owned by Riza Azis, as is Red Granite Capital Limited. Mr Aziz claimed ownership of the entities in his 2012 US tax return, and properly disclosed the transfer of funds from Aabar-BVI to Red Granite Capital Limited. Those funds, according to the Complaint, were reported as a gift under US tax law, and Mr Aziz, after discussion among his accountants and business manager, obtained a letter documenting the gift, signed by the CEO of Aabar [the now jailed Mohammed Al Huseiny]..”

So, there we have it, yet another ludicrous letter authenticating a “gift” of hundreds of millions of dollars!

But, at this point there appears to be a fatal contradiction in the legal argument. Riza’s excuses carry on to say that neither did he realise that Aabar BVI, which sent the money, was not in fact related to the real Aabar or IPIC. This was something that emerged from investigations, which showed how cash was diverted from the 1MDB Aabar joint ventures to this private BVI account:

“Nothing in the Complaint alleges that Mr Aziz …. knew that Aabar-BVI was unaffiliated with Aabar or IPIC”

At which point any judge must query how Riza could conclude that the money was a personal private gift from the CEO? Because, if this was indeed an official subsidiary of the Abu Dhabi wealth fund there could be no legitimate reason whatsoever to gift the step-son of the Malaysian PM money from it.

Innocent through ignorance? Riza Aziz

With such a tangle of excuses the former banker would make a good candidate for a role in one of his own movies “Dumb and Dumber To”. But how come his top lawyers didn’t spot the gaffe?

What they have just put in writing is that Riza THOUGHT he had been gifted tons of cash as a personal gift from the CEO of an Abu Dhabi sovereign wealth fund, which was doing business with 1MDB.

Yet he DIDN’T think there was a connection with the fact his step-dad was in charge of 1MDB.

On the other hand, he DID think that the account he got the money from belonged not to his pal, but to the Abu Dhabi sovereign wealth fund that was doing business with 1MDB!

Moreover, if the judge accepts that Riza is totally and utterly thick and thinks money falls from heaven and that public funds from Abu Dhabi can be privately offered to him by the wealth fund boss, it presents an immediate further question. If Riza is innocent through stupidity then who WAS responsible?

Back in Malaysia Najib’s PR people are already spinning that the former Second Finance Minister and the former Chief Executive of 1MDB were ‘treacherously’ misleading their boss by siphoning money out of the development fund and sneaking it deceitfully behind his back into his own bank account.

Poor Najib, the argument seems to go, was then misled into thinking that a Saudi Prince was passing him these billions, in order to support his moderate Muslim agenda. Have these two former underlings agreed to join the murder ‘scapegoat’ Sirul Azhar and Najib’s various other fall guys, by accepting “temporary” imprisonment in return for promised later reward?

Certainly, Riza’s lawyers have made clear that their argument is that if Najib’s men declare him innocent, then the United States should accept the finding of the foreign jurisdiction.

“[the] alleged offenses were committed entirely abroad, without the sufficient nexus to the United States required to invoke the jurisdiction of this Court”

However, under money laundering legislation, considerable due diligence is also required in the United States on the part of finance and legal professionals managing potentially suspicious transfers – particularly involving politically connected people like Riza.

Debra Johnson (nee Whelan) manages Riza’s money

So, if he is innocent, the spotlight falls on them. Riza is now closely bonded to a svelte legal lady, named Debra Whelan Johnson, who used to work at the Los Angeles wealth management company NKFSB as his personal relationship manager, until she departed from that company during the growing controversy over his finances in 2014.

At the time she was married to Channing Johnson, the partner at Loeb & Loeb who had incorporated Riza’s company Red Granite. It was he who initiated legal action against Sarawak Report for questioning those finances.

Later the couple divorced and Loeb & Loeb parted ways with Red Granite, leaving Whelan to set up her own company, which is mainly devoted to investing Riza’s remaining 1MDB-sourced millions.

So, if Riza didn’t understand where his money was coming from then what was Debra up to? Surely, it was her professional duty to both Riza and the US authorities to make sure everything was legitimately sourced? For a start, why did she fail to establish the basic facts about who owned the Aabar BVI company that sent Riza all that money?

Legal eagles who may know more?

Apart from Whelan, Riza’s current lawyers ought themselves perhaps to have been better informed about the origins of his cash, because, as Sarawak Report has already revealed, the firm’s own partners became engaged in an investment business with their client by taking a role in the company Panavista. Panavista invests Riza’s money.

Stan Pottinger, US lawyer and best-selling author, flew in to London to attend the investment meeting with Bradley

One British businessman attended a meeting held in Riza’s Belgravia townhouse last year (now included on the DOJ’s list of illegal assets) where they offered to invest £6 million in his company. Panavista’s offices are located in the next door building in Lygon Place.

The businessman, Nick Bradley, told Sarawak Report that it was money he was eager to accept. However, when he asked normal due dilligence questions about the origins of that money, he says he was not able to get answers he found satisfactory.

He concluded the money must be Riza’s private wealth, but it was not made clear and this concerned him, so he turned down the investment offer.

Since the law firm which is now representing Riza in court is so publicly linked to Panavista as collaborators, along with Debra Whelan, oughtn’t they have therefore done more to establish the origins of their politically connected client’s vast sums of money and themselves have established who owned Aabar BVI Limited?

David Boies of Boies Schiller & Flexner LLP – is counsel to Panavista and shares an office with Pottinger in New York

Monday, February 13, 2017

FELDA Super-Scandal Emerges As The New 1MDB Times Ten..

The new Chairman of FELDA, Shahrir Abdul Samad, was one of the people exposed for having received a big fat million ringgit cheque from Najib’s slush fund accounts, for which he has yet to give an explanation.

Najib has moved quickly therefore to bring this UMNO backbencher Chairman to heel when he appeared to stray this weekend, after he’d appointed the veteran politician to head the plantation fund last month (instead of an objective business leader, which was plainly needed).

To begin with, Samad had clearly decided that he did not want to end up the figurehead of the next 1MDB scandal (times ten on the Richter Scale). Therefore, unlike Arul Kanda, he decided to cry foul rather than start covering up from day one.

It didn’t last long. One assumes it took a far larger cheque to get Samad to change his tune, but by Sunday evening the party stalwart had denied his earlier reported statement, rattling out a list of unbelievably expensive global investments to apparently explain where all the money went.

These inflated purchases consisted mostly of hotels, which have nothing to do with FELDA’s core plantation business and many of which the fund is now desperately trying to off-load, doubtless at a loss, in order to finance borrowing and debts… and looming election costs:

Shahrir was commenting on reports that ..RM6 billion received by Felda after the FGVH listing has not been accounted for.

Shahrir said the RM1.438 billion invested in the service sector, especially property involving hotels, was to ensure long-term investments that can be beneficial in the future.

He said Felda had also purchased Felda Technoplant Sdn Bhd worth RM38 million while total accumulated loses for Felda amounted to RM108 million, involving the Transnovasi Project…

Shahrir, who took over the post from Isa Samad, said Felda had also decided to sell a hotel bought by the agency in London at a cost of RM548 million in 2012.

So, why did FELDA spend hundreds of millions on these hotels, when much of its plantation stock was already in need of regeneration and the business needed to upgrade and improve its productivity on behalf of the long-term interest of Malaysia and its farmers?

Sharir must know that whilst 1MDB has moved the nation to righteous fury, that anger will measure nothing compared to the outrage and disgust of the hundreds of thousands of FELDA families, who have started to realise how all their savings and their patrimony have disappeared with the sinking fund.

FELDA Super Scandal

Back in 2012 the FELDA Global Ventures sell off was another of the new Prime Minister Najib Razak’s ‘economic master-strokes’. Reuters reported that it was the 2nd biggest ever IPO after the Facebook stockmarket launch – it put Malaysia on the global map.

However, it also disposed of a hugely valuable industry that had been originally founded and nurtured in the interests of the working families, whose lands and livelihoods were tied up in the plantation lands.

Reuters recorded how at that time many of those farmers were therefore rightly worried and reluctant. They knew they could never buy back their heritage, which had so grown in value in recent years. However, Najib, also Finance Minister, knew how to tempt their worries all away:

Felda’s listing plans were initially met with resistance from the farmers who partly owned the firm and feared the loss of control of an asset they had invested in for generations.

The government, a key shareholder in the firm via state-linked funds, sweetened the deal with windfall payments totaling nearly $5,000 each generated from the a fifth of the IPO proceeds.

To keep the farmers happy, government-linked funds and the domestic pension fund, which accounted for part of the institutional tranche, made a rush for the stock during the book-building process.

“This Felda IPO is an embarrassment,” said an official with a Malaysian bank-backed fund management firm. “About 23 percent of the book was allocated to ‘friends and family’, all at the expense of legitimate investors with potential synergies.” [Reuters 2012]

So, for around RM15,000 a family (a fifth of the money raised) Najib bought the resisters round and also directed a mass of government linked companies to join the rush to build up the stock market share price to astonishing levels.

At their height at the time of the launch shares in the new FELDA Global Ventures traded at up to RM5.46 (ringgit), whereas now after years of plunder and mismanagement they are trading at a miserable RM1.9.

It represents a horrifying loss for investors. Those include government-controlled funds entrusted with the money of ordinary savers like Tabung Haji, which was encouraged for political reasons bump up the original share price. Opposition MP Rafizi Ramli has pointed out that the pilgrimage fund has lost a billion ringgit owing to the plummeting share value.

That represents a billion ringgit of savers’ pilgrimage money lost thanks to politically driven bad decisions to pay far too much money for those shares.

And the situation went from bad to worse. Under Najib’s original toady Chairman, Isa Samad, the money that had been made from that original IPO has by all accounts been disappearing. As one insider has told Sarawak Report:

“an excess of RM2 Billion is being furiously padded on projects being approved to be siphoned off my PM & his wife”

Such projects would appear to have included the ludicrous decision to buy a 37% stake in the Indonesian plantation business of Najib’s personal friend Peter Sondakh for $700 million, which was at least double its market valuation, last year.

Following that scandal the Employee Provident Fund, which has also clearly lost huge sums of ordinary Malaysians’ pension money owing to FELDA Global Ventures, pulled out of it investment in the fund. Yet, Najib has persisted in trying to force FELDA itself to invest in Peter’s projects. The reason seems blatantly obvious.

Where did the money GO?!

So, with all those developments the question facing Shahrir Abdul Samad, as the new incoming Chairman, was what has happened to the original $3 billion (RM15 bn) windfall made by FELDA back at the time of that original IPO in 2012 (just before the election)?

Just four years later, after all, the fund is in difficulty and having to borrow money!

One fifth of the money went on that up-front RM15,000 bribe to the farming families, in order to persuade them to support the public offering, according to coverage at the time.

Thursday, February 02, 2017

Coutts Rapped - Najib Trapped!

Another bombshell has been detonated by international investigators under the Prime Minister of Malaysia’s rickety construction of lies over 1MDB.

Today the Swiss finacial regulator, FINMA, finally produced its devastating verdict on the conduct of the private bank Coutts, which was exposed by this news site as the major facilitator of the original 1MDB heist back in February 2015.

Having closed down investigations in Malaysia, which had turned up volumes of information resulting in a series of charges being drawn up against the Prime Minister, Najib’s new Attorney General has dogedly maintained that there was no evidence of wrong-doing or misappropriation at the fund.

Yet today, FINMA detailed a trail of theft from 1MDB in a statement that further corroborates findings by the United States Department of Justice and the Singapore Courts. The authority has therefore sanctioned the bank for having facilitated the heist and failing catastrophically in its anti-money laundering requirements.

As part of the punishment the Swiss financial authority has commanded Coutts, which was owned by the UK state-owned bank RBS at the time of the transgressions, to disgorge a stunning US$ 6.5 million (CHF 6.5 m) in illegal profits from its 1MDB relationship.

Possible criminal charges are also pending against individuals at the bank.

Detailed Charges

The FINMA statement, the product of over a year of investigation, lays out in detail what took place between Coutts and 1MDB, referring plainly to the fund’s criminal collaborators, who were Najib’s advisor Jho Low and the directors of the company PetroSaudi.

Yak Yew Chee – early relationship with Low?

This detailed information contrasts with the vague and contradictory denials from 1MDB and Najib Razak over past months, which have failed to provide any other convincing explanation for the disappearance of billions from the fund, whilst claiming that an anonymous Saudi Royal donated the billions that subsequently popped up in Najib’s own KL bank account.

The Department of Justice has in fact traced the bulk of that money directly back to 1MDB.

Key relationship started early

According to FINMA the relationship between certain Coutts bank employees in Singapore and ‘individuals who subsequently became associated with 1MDB” started back in 2003. There is little doubt that the regulator is referring to Jho Low and his relationship manager Yak Yew Chee (currently serving time having pleaded guilty to a number of related charges in Singapore), along at a later stage Yak’s boss, HansPeter Brunner, who took charge of the branch in 2002.

Brunner remains grounded in Singapore pending further investigations against individuals from Coutts/BSI

Sarawak Report was the first to reveal that it was Jho Low who had incorporated an off-shore company May 18th 2009, named Good Star Limited, in the Seychelles with the assistance of the team at Coutts Singapore, which was registered as the principal client on the account.

Coutts agreed to the last minute cash transfer

Separately, we have published email evidence from PetroSaudi’s data, which shows that initially Low had hoped to set up an account at BSI Bank in Geneva in late September 2009, in order to receive $700 million (originally $720 million) siphoned out from 1MDB in the guise of a bogus loan repayment to PetroSaudi as part of the joint venture contract.

PetroSaudi had also planned to place its joint venture business account at BSI and emails make clear that the collaborators believed that having both accounts at the same bank would help in promoting the fiction that PetroSaudi owned Good Star.

This was laid out in an internal document named ‘PetroSaudi Plan’ – sent to PetroSaudi directors by Low assistant Seet Li Lin 15/09/09, showing how the $700 million would be diverted to Low in his capacity as “Promoter” of the deal.

Close text

Objectives to be met:

Signing by 30th Sept 2009

First tranche of Malaysian investments: US$1,000mm

US$280mm will remain in JV company

US$720mm will be moved via PSI

MDB must hold 49% or less in JV company

MDB to recognize approximately US$186mm in revaluation gains due to buying below valuation due to ability to close the deal fast.

Issue Structure:

Is it possible to use a BVI for the new JV company instead of Cayman Island company?

We will like to structure the US$720mm as a repayment to PSI for loans extended to the JV company or asset.

PATRICK: please improve on our proposed structure as you deem fit.

Issue: Valuer

Timeline consideration. Time required to generate report.

Valuation figure. We need to work backwards, with the objectives above in mind to produce the right valuation.

Issue: Agreements required

For MDB – Joint venture agreement with PSI

5 board members including 1 chairman

Chairman will be PSI

MDB will nominate 2 members, PSI will nominate 3 members

Issue: Official story

MDB is partnering the Saudi royal family to spur sustainable economic development in Malaysia by investing in global renewable and non-renewable energy resources and others.

Issue: Bank Accounts

BSI as bankers

Company receiving the monies must use same bank as Promoter

Payment out of PSI must follow immediately after its receipt at PSI

Meeting in Switzerland

Meeting BSI

Preparation of various agreements to pay Promoter – $720mm

1 introduction fees to Promoter

Several deep in the money derivative contracts in favor of Promoter (with various companies)

Valuation report should come in to value assets at US$3.285bn. This will result in US$186m gains attributable to the US$1000m investment made by 1MDB.

Key Dates:

18th Sept (Fri) – Meeting in Geneva

30th Sept (Wed) – Prince Turki in Malaysia for official signing

However, compliance officers at BSI pulled out of the deal just two days before the signing of the 1MDB PetroSaudi Joint Venture, after asking increasing questions about compliance, leaving the collaborators with a problem.

Please let us come back on our questions, my compliance needs some additional information before sending her presentation to our General Management.

_________________________________________________________________

1. Business Plan

OutflowsUSD 100 JP Morgan LondonUSD 200 remains at 1MDB Petro Saudi Ltd (BVI)USD 700 will go to various accounts to be opened at BSI (says Tarik Obaid) – to explain

PM: The 100 (at JPM) and 200 (at BSI) will be used to fund the assets costs – basically exploration and production costs – and also to purchase assets. The 700m is premium that was made in the transaction and will be used to fund future transactions in any sector (not necessarily oil and gas)

Thank you for your valuable information and help.Our compliance is currently consolidating all information,and will submit it to our General Management who is already informed.Overall, the outlook is quite positive.

Allow me 3 questions please :____________________

Business Plan

OutflowsUSD 100 JP Morgan LondonUSD 200 remains at 1MDB Petro Saudi Ltd (BVI)USD 700 will go to various accounts to be opened at BSI (says Tarik Obaid) – to explain

Can you explain us briefly where and how the money will be invested ?We suppose the business plan is financing oil investments/projects.1. My compliance has to give some sort of explanation on the 700 especially .We are very happy it stays at BSI.

PM: The 100 (at JPM) and 200 (at BSI) will be used to fund the assets costs – basically exploration and production costs – and also to purchase assets. The 700m is premium that was made in the transaction and will be used to fund future transactions in any sector (not necessarily oil and gas)

_______________________

2. Joint Contract : it is not clear between which entities the contract will be :

PM: I don’t follow question, let’s discuss tomorrow. The JV company is the BVI company called 1MDB PetroSaudi Ltd and this is a JV between PetroSaudi International (Holding) Cayman Ltd and 1 Malaysia Development Berhad (Malaysia).

__________________________

PricewaterhouseCoopers3. Valorization of Argentinean and Turkmenistan’s Assets : very important to get please

PM: This will happen but may be another competent authority as PWC is being too slow.

With the clock ticking, PetroSaudi turned to JP Morgan, where Director Tarek Obaid had business and that bank agreed to accept the account for the joint venture, which was to receive $300 million out of the $1 billion transferred from 1MDB.

Jho Low, who was now looking for a place to park the remaining $700 million “loan repayment to PetroSaudi”, turned to his own existing relationship, which was at Coutts.

Frantic emails were exchanged in the closing hours of the joint venture deal between 1MDB, PetroSaudi and Coutts compliance officers in Zurich over this sudden request to transfer $700 million into a newly created account, which showed the concern amongst Coutts staff about accepting this huge and suspicious sum of money when there was inadequate information about who owned the account and how the money had been earned.

Please see an email request from RBS Coutts to reveal the beneficiary name pertaining to 1MDB’s remittance.

In that sense, I believe RBS needs confirmation on the beneficiary’s name in order to complete their internal risk mitigating processes as no name was

We will await your instructions on whether to reveal the beneficiary name and address (please provide) to RBS Coutts.As requested by them, we will have to send it out via email and an authenticated swift message so would appreciate a reply as soon as possible.

This e-mail may contain confidential and/or privileged information. If youare not the intended recipient (or have received this e-mail in error)please notify the sender immediately and destroy this e-mail. Anyunauthorized copying, disclosure or distribution of the material in thise-mail is strictly forbidden. —– Forwarded by Jacqueline Ho/db/dbcom on 10/02/2009 05:41 PM —–

Prakash Gopi/db/dbcom

10/02/2009 04:55 PM

To Jacqueline Ho/db/dbcom@DBAPAC

cc Jeremy Lewis/db/dbcom@DBAPAC

Subject Fw: REQUEST OF COUTCHZZ

Jac,

RBS Coutts is requesting for bene’s full details.Can we proceed to provide the necessary information. If so, appreciate if you could provide me with the relevant details.

Warm Regards,

Prakash GopiGlobal Market OperationsDeutsche Bank (M) Bhd03-20536851

—– Forwarded by Prakash Gopi/db/dbcom on 02/10/2009 04:53 PM —–

Laurent.Schmid@rbscoutts.com

02/10/2009 04:38 PM

To Prakash Gopi/db/dbcom@DBAPAC

cc Eliane.Humair@rbscoutts.com, Thomas.Tuerler@rbscoutts.com

Subject RE: REQUEST OF COUTCHZZ

Dear Prakash,Please urgently confirm the full name of the final beneficiary of the funds per e-mail and authenticated swift (see details below) in order for us to apply the funds.We are not in a position to credit the funds without full beneficiary details (full name, address, account no.).

What can be seen is that Jho Low was himself being back-copied into these emails (above) and that he responded to his colleagues at PetroSaudi (also back-copied) that the problem would soon be resolved.

FINMA’s further evidence today makes clear that individuals high up at the bank over-ruled the concerns of the compliance department and that there were numerous shortfalls in the due diligence process and in the documentation provided by Jho Low:

“In the summer of 2009, Coutts opened a business relationship in Zurich with a young Malaysian businessman. When the account was opened, information was provided to the effect that USD 10 million would be transferred to it from the account holder’s family assets. Instead, in the autumn of 2009, approximately USD 700 million was transferred to the account from the Malaysian sovereign wealth fund 1MDB. The reasons given for this transaction were inconsistent, and some information was changed retrospectively. Moreover, the documents presented in support of the transaction contained obvious mistakes, not least the fact that the identities of the contracting parties were transposed. A member of the bank’s Compliance unit noted in an internal email: “It would be the first time in my career that I would see a case where [in] an agreement over the amount of USD 600 Mio. or so the role of the parties has been confused.” The Legal Services unit even spoke of the risk of a “total fabrication”. Nevertheless, the bank failed to clarify the background to the transaction with the necessary diligenc [FINMA Statement]

It is noticeable that within this last minute rush and change of plans there were still attempts made to disguise the eventual destination of the money from people who might be scrutinising matters in Malaysia.

Both payments were initially sent to JP Morgan, in order to create an appearance that the money had all gone to PetroSaudi, however the $700 million payment was then designated for forwarding to the separate Coutts account:

Payment directions from PetroSaudi’s White & Case lawyers were designed to make the $700m transfer look as if it was also going to PetroSaudi

The FINMA statement is unequivocal in support of the finding that $700 million was therefore stolen from 1MDB in September 2009 under the guise of the joint venture with PetroSaudi and went to Jho Low. Something the Prime Minister has repeatedly denied.

The authority effectively corroborates Singapore’s findings that Jho Low later sent much of the money (over half a billion dollars) on to his ADKMIC account at BSI Bank in Singapore, where Brunner, Yak and their team moved over to in October of that year:

“Subsequently, between late 2009 and early 2013 numerous high-risk transactions with a total value of USD 1.7 billion were processed through the account. For example, more than USD 0.5 billion was transferred to a domiciliary company belonging to the businessman on the basis of intransparent loan agreements. The bank justified these actions on the basis that the same beneficial owner was involved. Coutts took no action to clarify the use of USD 35 million for visits to casinos and the purchase of a range of luxury services (e.g. the chartering of yachts and private aeroplanes).”

Even more money went through Coutts in later 1MDB transactions

FINMA has confirmed that in total as much as $2.4 billion went altogether into the Coutts Zurich account, far more than the $1.83 billion that disappeared from the original PetroSaudi joint venture with 1MDB through Good Star:

“When the Coutts employees moved to another bank in Singapore in 2009, some of the business relationships were transferred to Coutts Zurich. In total, 1MDB-related assets to the value of USD 2.4 billion were transferred through Coutts accounts in Switzerland” [FINMA Statement]

This confirms the DOJ’s earlier contention that money raised from later 1MDB borrowing associated with the Aabar Abu Dhabi wealth fund (whose managers have now been jailed for their part in the 1MDB scandal) also went through Coutts.

US$6.5 billion was raised in loans 2012-13 by Goldman Sachs (whose Asia head is now sacked and under investigation in the United States), much of which has been traced to bogus off-shore accounts through BSI and Falcon Bank set up by Jho Low (alias Eric Tan) and the ex-managers of Aabar (Khadem Al Qubaisi and Mohd Al Husseiny).

FINMA confirms that Coutts also was involved in the disappearance of a further $680 million dollars from 1MDB in March 2013. The sum matches the $681 million that was sent in the same period to Najib’s account in KL, but this money went to Jho Low.

“Although Coutts had serious grounds for suspicion due to the unusual transactions from 2009 onwards, it opened a further business relationship with the Malaysian businessman in the summer of 2012. Contrary to the information provided when the account was opened, USD 380 million was transferred to this account from an offshore company in March 2013. A further USD 300 million followed. Pass-through transactions were then used to transfer most of the funds received to another domiciliary company belonging to the businessman. Despite the obviously suspicious nature of these transactions, the bank failed to look into them seriously and was content to make superficial enquiries.

The separate DOJ filing in July has also traced these sum through Coutts which went into the account of a Jho Low owned company called Dragon Market:

Much of the cash was then laundered back through another Jho Low account called Dragon Dynasty at BSI Singapore and into accounts owned by his father and brother, in order to disguise its criminal origin, according to the FBI.

FINMA makes clear its concern that the prime culpability for these transactions lay at the highest level at Coutts Bank. It means that very senior figures at Coutts in Zurich, as well as at BSI which went on to handle these transactions, were willing to participate in a culture of deliberate complacency when it came to processing huge sums of money from 1MDB:

A number of bank employees expressed serious, timely concerns to their managers and the Compliance unit about the business relationship with the Malaysian businessman. Following negative media reports, the individual responsible for providing advisory services to this businessman in Singapore noted: “I feel very uncomfortable with this guy and the transactions that are going through the account. I think the management has to make a decision whether to keep this relationship.” …… Instead it was decided to continue with the lucrative business relationships and process the transactions. As early as March 2012 the following was noted in an internal bank meeting about the business relationship with the Malaysian businessman: “[X] is a key client who we are comfortable with the Source of Funds, Source of Income and activity performed on these accounts”. In 2013 and 2014, various compliance bodies within the bank again raised and questioned the business relationship. On each occasion, however, they decided to continue with it.

Poor UK record on 1MDB

The owner of Coutts at that time was the UK government-owned entity RBS. FINMA says it has notified RBS and the UK financial regulator the Financial Conduct Authority (FCA). However, there is no evidence that any UK authorities have taken any action whatsoever to investigate any of the UK aspects of the 1MDB scandal. A British Foreign Office delegation in due in KL shortly to continue to lobby for preferential trade deals.

Last year the UK trade representative at a special reception held for Najib two days after London’s anti-corruption conference and in the same venue, Lord Marland, said it would not be right to judge a man (Najib) as guilty until found to be so in court, implying that he is prepared to suspend judgement on several of the world’s most notorious criminals when it comes to trade and politics.

Switzerland on the other hand today also indicated it is also looking at a further 5 banks who were involved in the 1MDB scandal. BSI and Falcon are already facing proceedings – other names in the frame are Julius Baer, Credit Suisse, UBS, JP Morgan Suisse.

If any of these plead innocence, then they will be able to bring the Malaysian Prime Minister, the sole shareholder and signatory of 1MDB, to testify on their behalf.